2017 (12) TMI 1595 - HC - Income Tax

Treatment to rental income - business income OR income from house property - principal object of the assessee company is not letting out of properties - Held that - When this matter came up for hearing on 08.12.2017, we posed a question to the learned Senior Standing Counsel for the Revenue as to whether the Department accepted the earlier decision of the Tribunal in the assessee s own case for the assessment year 2008-09. The learned Senior Standing Counsel sought for an adjournment to verify the facts. Today, when the case is taken up for hearing, it is reported that the Department accepted the earlier order of the Tribunal in the assessee s own case for the assessment year 2008-09 and that no appeal has been filed against that order. Thus, we find that the substantial questions of law have to be answered in favour of the assessee and against the Revenue.

Summary

Issues:
- Whether the Appellate Tribunal correctly categorized the rental income as 'business income' instead of 'income from house property' for the appellant.
- Whether the Appellate Tribunal erred in allowing the rental income as 'business income' despite a previous judgment by the Apex Court.

Analysis:
1. The Revenue filed an appeal challenging the categorization of rental income by the Appellate Tribunal. The Tribunal had based its decision on a previous order in the assessee's case for the assessment year 2008-09.

2. During the hearing, the Revenue was questioned about accepting the earlier Tribunal decision for the same assessee in 2008-09. It was confirmed that the Department had accepted the previous order and did not file an appeal against it. Consequently, the substantial questions of law were decided in favor of the assessee against the Revenue.

3. The High Court, considering the finality of the Tribunal's earlier decision in the assessee's case for the assessment year 2008-09, dismissed the tax case appeal. The judgment highlighted that since the Department had accepted the previous order, the appeal could not be upheld, and no costs were awarded in this matter.